To say 2020 has not gone to plan — by any stretch of the imagination — is an understatement. But with two quarters down and two to go, checking in on your business plan can ensure that you finish the year strong.
What’s your favorite business planning quote? There are plenty to choose from — that’s because when you have your own business, business planning is an essential activity. I’ve found that when it comes to real estate sales, the amount of activity devoted to business planning directly correlates to success.
I know most of my broker-owner colleagues would agree that most agents do not have written business plans. My guess is that only about 10 percent do, and these are usually the top agents. Another 50 percent have their goals and plan elements in their head, while the remaining 40 percent of agents don’t have defined goals but still can be active.
Therefore, they don’t have a lot of insight into the most valuable uses of their time because they aren’t following a set plan. That makes their activities less efficient and, more likely than not, less lucrative.
“A goal without a plan is just a wish.” – Antoine de Saint-Exupery
Success can mean different things to different people. Knowing what success looks like to you is how you define your goal. And having a goal is foundation to your plan. Not only does that goal give you a focal point, it shapes your activities on a daily, weekly, monthly and quarterly basis.
When I work with my agents on goal-setting, I encourage them to think about how they are coming up with their goals. Is it a monetary goal or a production goal? How does that goal relate to last year’s production? What are the tactics you will use to get to this year’s goal?
That typically includes outlining a step-by-step process of how they will arrive at their goal. How many listings do you need to hit your goal? How many calls do you need to make to get those listings? What marketing efforts will support your prospecting? How much have you budgeted for marketing? (I usually recommend 10 percent of their annual income.) Understanding the activities required to meet a goal and mapping out that activity is the first part of formulating a business plan.
“Plan your work and work your plan.” – Napoleon Hill
For those agents with a written or mental plan, I spend a good amount of time counseling them on evaluating the effectiveness of their activities. We look at progress towards goals and evaluate where we can improve.
Are direct mail postcards not having a great response? Maybe it’s time to redirect those funds to a social media campaign. Getting listing appointments but not winning the listings? Maybe the listing presentation needs a few tweaks. Is your sphere not creating as many referrals? Maybe it’s time to up your networking game.
You can’t manage what you don’t measure, and measuring the impact of all of your activities helps you manage to your goal.
That said, what kind of a conversation do I have with agents who are tracking ahead of their goal? I always impress upon these agents the danger of stepping back and going on cruise control. Maintaining momentum is important to keep your funnel full.
This is also a time for agents who are having a good start to the year to tweak various elements of their plan. What’s working really well? Amplify efforts there. Can you determine ROI on your activities? If so, focus on areas that can help bring more money to your bottom line. Something not working? Stop doing it, and add that expense to your bottom line.
Another critical element of business planning is portfolio diversification to balance out market shifts in any one area. This means having revenue streams from retail (traditional buyers and sellers), investor and builder segments. Because when you control the inventory, you control the market.
“It takes as much energy to wish as it does to plan.” – Eleanor Roosevelt
Making the shift from “wish” to “win” requires a simple shift in thinking. Sure, thinking about business planning can be intimidating, but I’m here to assure you that in reality it’s not. Take the time to research your company and brand’s online learning resources — many, including BHGRE, offer online business planning courses.
Rethink checkbook financial management. In the time it takes to balance a checkbook, you can set up a working P&L for your business that puts financial data right at your fingertips.
Instead of wasting time wishing for more listings, take advantage of all the marketing tools and programs at your disposal to make your marketing dollars go farther and make your wish a reality.
Instead of wondering where to invest your time, ask your broker for advice. I personally love sitting down with my agents to analyze their plans and make adjustments that will move them closer to their goals.
And finally, instead of beating yourself up that you don’t have a plan, sit down and make one today. Because in the immortal words of well, myself, “It’s never too late to build a business plan.” Here’s to your success!